Traynor Article - Dual Contracts

[ian1964 10,780]

http://www.dailyrecord.co.uk/sport/f...rights-1352783

 

 

LEWIS HAMILTON is leaving home at the end of this Formula One season. After 14 years with McLaren, the team that made him rich and famous, Hamilton is changing direction.

 

The 2008 world champion is quitting McLaren for Mercedes to pursue his goal of matching his hero Ayrton Senna, by becoming a three-time champion.

 

Yet McLaren, who have been the power behind Hamilton since he was a wide-eyed kid, have won 16 races so far in the past three seasons, while Mercedes have taken only one Grand Prix in that time.

 

McLaren also made Hamilton an offer that would have guaranteed heâ??d be the highest-paid driver on the grid.

 

It wasnâ??t enough to keep him. With Mercedes heâ??ll still be paid more than anyone else â?? itâ??s been reported Hamilton will rake in £15million a year from his new team.

 

But, you might wonder, where exactly is this going? Why is there Scalextric for grownups in the Winner?

 

Well, let me tell you what weâ??re driving at here and why football, especially the SFA and SPL, should be interested in whatâ??s happening in another testosterone-fuelled sport. Itâ??s about image. Or image rights to be exact.

 

With Mercedes, itâ??s believed Hamilton will have greater freedom to exploit sponsorship appearances and image rights. So, on top of his enormous basic salary he could earn a small fortune during the course of his new contract through money pulled in every time a T-shirt, mug, pen, toy car, picture or anything with his face or name on it is sold.

 

And having reported F1, I know loads of this tat is sold to that strange breed â?? larger in number than you might think â?? who are attracted to motorsport. Like golf geeks theyâ??re quite mad. They arrive with more logos and names on their gear than the drivers themselves.

 

Because there are so many doting fans out there a well-known driver, golfer, tennis player, or footballer will make fortunes by owning the rights to their own brands, their images. Now, here is the point for the SFA and SPL.

 

If a player signed by a Scottish club is receiving a cut, or all of the money, from the sale of any tops or the trashy memorabilia featuring his name or face, would the governing bodies know about it?

 

Would the clubs have to detail payments, or inform the authorities of any contracts that may have been drawn up and signed?

 

Well, if we look at the terms of the SPLâ??s case against Rangers then yes, every kind of payment or deal should be revealed. It might even be possible to argue any kind of image rights deals, no matter how insignificant, are actually dual contracts.

 

And would they breach Scottish footballâ??s rules? We have a right to know and I suggest once the SPLâ??s lawyers have concluded their investigation into whether or not a number of former Rangers players had two contracts, these legal hounds should be turned loose again. With orders to sniff out any signs or evidence that might prove clubs, including Rangers, may have operated any other payments designed to exploit tax systems.

 

Or are Rangers really the only club capable of some kind of wrong doing?

 

Of course investigating others would be expensive but the SPL and SFA always seem to have enough for legal pursuits no matter how daft or downright vindictive they might appear to some fans.

 

However, you do have to wonder where that money is coming from.

 

After all, a cash-flow problem meant clubs received only half (£300,000) of their August television payments and it would be interesting to know if they are being left short so that legal fees can be met.

 

But remember, we are dealing with fair play and the gameâ??s integrity here and we canâ??t start putting prices on those things, now can we?

 

So, in the interests of fair play, might it now be incumbent upon the two bodies to run forensic checks on every other club?

 

The governing bodies, the protectors of our game, should be scanning every set of accounts sent in by every club. You never know what might come to light.

 

What would be the ruling if, for instance, if it was found a club had been paying foreign players modest wages, which were detailed and

registered here, but lodging other payments in bank accounts back in the playersâ?? home countries?

 

Far-fetched? But then again maybe not because agents and accountants can be pretty adept at enhancing the incomes of their clients and all sorts of strange deals have been struck within football.

 

And increasing earning power is exactly what image rights contracts can do, even for ordinary players.

 

Basically it works like this: A player wants £500,000 a year but insists his image rights are worth £100,000. The club might agree to pay him £400,000 but allow him the freedom to exploit his image rights. The money from those rights goes to another source, usually a company, which means both the club and player are benefiting.

 

Both are beating the system. Thatâ??s a pretty simple example but the fundamentals are the same whether itâ??s £100,000 or £10m and we ask ourselves if these deals are really any different from EBT/dual contracts.

 

Frankly, anyone who believes no player, or agent, has ever asked a

Scottish club for the freedom to exploit their own image rights is naive in the extreme.

 

Of course theyâ??ve asked, so it isnâ??t unreasonable to assume some might have been accommodated. And neither is it outrageous to doubt that every club will have disclosed in exact detail to the SFA, SPL or SFL every pound paid to every player ever signed.

 

Yet, this seems to be the standard the SPL are demanding of one club but not all, even though the league body and SFA should have asked Rangers about their EBT scheme from the first year it was included in the Ibrox accounts.

 

Iâ??m quite sure a growing number of people at fairly high levels in both organisations are now wishing they hadnâ??t embarked on the process that could lead to championships won by Rangers being erased from the records.

 

But they may have been muscled aside by, well, letâ??s just say more zealous individuals.

 

And of course they might regard the entire business as some kind of crusade to get to the truth as it has formed in their own minds.

 

Itâ??s a bloody mess and it will get worse before we see an end to it. Scottish football? Not at all a pretty image.

[Crimson Dynamo 128]

I've been more and more impressed with Jim Traynor's writing recently. He has been one of the few journalists to be asking questions of the establishment instead of going with the crowd

[foggy dewhurst 0]

them accrooss the city payed out a fortune in image rights back in the days of the bunnet looks like another tax dodge to me

[andy steel 0]

Sure sounds like Traynor is sitting on a pile of info which might, hopefully, reveal the rank hypocrisy behind the 'sporting integrity' mantra.

 

That read like a thinly veiled threat to go public with stuff which certain parties - the more energetic one, or whatever he called them, basically celtc, Hibs and Dundee Utd - might find embarrassing. Here's hoping!

[gisabeer 409]

Sure sounds like Traynor is sitting on a pile of info which might, hopefully, reveal the rank hypocrisy behind the 'sporting integrity' mantra.

 

That read like a thinly veiled threat to go public with stuff which certain parties - the more energetic one, or whatever he called them, basically celtc, Hibs and Dundee Utd - might find embarrassing. Here's hoping!

 

I think quite a few will be sitting info but are waiting to see which horse to back. traynor is first out of the traps.

[forlanssister 3,114]

HMRC investigates legitimacy of Image Rights structures

 

Her Majesty's Revenue & Customs is currently investigating whether a number of professional football, rugby union and rugby league clubs and players owe the Revenue unpaid tax relating to image rights payments made by clubs to their players in addition to the remuneration which players receive under their playing contracts.

 

HMRCâ??s Civil Investigations Unit is considering whether more than 100 arrangements involving clubs paying their players in respect of their image rights â?? being the right to use, license and commercially exploit that playerâ??s name, image and other personal attributes â?? are effectively depriving HMRC of income tax.

 

Historically, image rights payments have not been treated by the tax authorities as taxable because technically they do not constitute income and clubs do not have to pay national insurance or PAYE in relation to such payments as a result.

 

However it is believed that many professional clubs have attempted to exploit this tax regime by unfairly apportioning excessive payments in respect of image rights and reducing remuneration payments under playing contracts.

 

Such measures present an additional benefit to foreign national players playing in the UK, the majority of whom are non-domiciled and consequently are only taxed on foreign investment income and capital gains on a remittance basis although image rights tax regimes in France, Spain and Italy are better established and more developed. Last year HMRC abandoned plans to demand withholding tax from any foreign players appearing for English clubs who win prize money from appearing in European elite competitions such as the 2011 UEFA Champions League and UEFA Europa League.

 

It is understood that nearly half of all Premier League clubs are in the process of being investigated. The Premier League is attempting to broker a deal with HMRC on Premier League clubsâ?? collective behalf. In rugby union, a collective settlement has already been agreed between HMRC and Premier Rugby, the company which represents the collective of clubs participating in the Guinness Premiership.

In February, a representative of the Premier League stated that: "Discussions are ongoing with HMRC to try to reach a mutually acceptable position. Both sides agree that it is acceptable for the assignment of a proportion of income to image rights, however the question is how best to decide what is a reasonable level across a multitude of varying contracts and levels of player."

 

Nine years ago, HMRC lost a landmark case against the then Arsenal players Dennis Bergkamp and David Platt in relation to claims made by the tax authorities that image rights payments made to offshore companies controlled by the players constituted a form of tax avoidance. Platt and Bergkamp were able to take advantage of the offshore structuring because they were non-domiciled, having previously spent a substantial amount of time playing in Italy.

 

Since that decision, it has been common practice for many playersâ?? representatives to establish offshore image rights companies to which the players assign or grant an exclusive licence of their image rights. In this way players benefit from the lower corporation tax paid by their companies.

Some stakeholders consider that HMRC is unfairly targeting the sports market to recoup additional taxes, and therefore placating the public at large by taking from those who can more easily afford to pay.

 

http://www.harbottle.com/hnl/pages/article_view_hnl/6259.php

[der Berliner 3,882]

I believe in any HMRC and SPL and SFA investigation into image rights and dual-contracts when I see it. And I for one doubt that I will see anything of that sort within these next 5 years or so.